A Foreign
Trade Zone (FTZ) is an area within the geographical boundary
of the United States that is considered to be outside the
Customs territory of the U.S.

Companies may bring foreign and domestic merchandise into
zones for storage, testing, relabeling, displaying, manufacturing,
and for eventual entry into the U.S. commerce or for exportation
from the U.S.

All Customs duties and federal excise taxes are deferred while
merchandise is in a zone and, in many instances, these duties
or taxes can be substantially reduced or eliminated through
zone use.

Advantages
Excerpts Exports from U.S. Customs Procedures and Requirements
brochure, U.S. Customs:

Customs
duty and internal revenue tax, if applicable, are paid when
merchandise is transferred for consumption.

While
in a zone, merchandise is not subject to U.S. duty or tax.
Certain tangible personal property is generally exempt from
state and local ad valorem taxes.

Goods
may be exported from a zone free of duty and tax.

Customs
procedural requirements are minimal

Merchandise
may remain in a zone indefinitely, whether or not subject
to duty

Customs security
requirements provide extra protection against theft.

The zone
user who plans to enter merchandise for consumption in customs
territory may elect to pay either the duty and taxes on the foreign
material placed in the zone or on the article transferred from
the zone. The rate of duty and tax and the value of the merchandise
may change as a result of manipulation or manufacture in the zone.
Therefore, the importer may pay the lowest duty possible on the
imported merchandise.

Merchandise
under bond may be transferred to a foreign trade zone from the
customs territory for the purpose of satisfying a legal requirement
to export or destroy the merchandise. For instance, merchandise
may be taken into a zone in order to satisfy and exportation requirement
of the Tariff Act of 1930, or an exportation requirement of any
other Federal law insofar as the agency charged with its enforcement
deems it advisable.